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So much promise, so little progress. Populated with creative people and filled with natural resources, Africa, one might think, should be a global powerhouse. Instead, the continent is filled with tragedy.

That doesn’t mean some people don’t prosper. In Africa Unchained: The Blueprint for Africa’s Future, George Ayittey writes,

Only death will separate African politicians and elites from their Mercedes. In East Africa, they are called the wabenzi — men of Mercedes Benz — in Swahili.

A native of Ghana, Ayittey teaches economics at American University and is president of the Free Africa Foundation. He has long fingered rampant misgovernment in Africa as the primary reason so many people live in such desperate poverty. Africa Unchained paints a bleak portrait of the present, but Ayittey also looks to the future. He sees hope in “unleashing the entrepreneurial talents and creative energies of the real African people — the peasants.”

As an African, Ayittey obviously and genuinely shares the pain of a people ravaged by war, disease, corruption, oppression, and poverty. The effect on everyday life is everywhere obvious. He sadly writes of “steaming squalor, misery, deprivation, and chaos.”

The problem is not just relative failure, that is, the continent’s inability to grow as fast as states elsewhere have grown. Particularly shocking is the fact that many African countries have literally imploded, leaving their peoples poorer today than one, two, and three decades ago. For instance, in sub-Saharan Africa per capita GDP shrank an average of 1 percent a year between 1975 and 1999.

Ayittey discusses Ghana, which won independence in 1957, when it matched the economic development of South Korea. The former was filled with natural resources and educated professionals and had not recently suffered through a devastating war. “But 40 years later, South Korea’s income per capita is ten times that of Ghana: $4,400 versus $420,” he relates.

Immiserating poverty leads to malnutrition, inadequate education, high child mortality, poor health care, and premature death. In a world of expanding opportunity, Africans are being left behind.

What makes the picture particularly poignant is the fact that this enormous suffering has been so unnecessary. There are African success stories, such as Botswana, Mozambique, and Uganda. The first has been an island of stability and prosperity since becoming independent four decades ago. The other two have surmounted tyranny and civil war.

Success did not come easily. But good governance yielded results. Most nations, however, have not been well-governed. As Ayittey documents so effectively, Africa’s failure is a leadership failure. Africans have not been well served by those who have won their trust in the occasional election — or, all too often, who simply seized power.

Ayittey smashes ideological icons when he argues that the failure extends back to independence. Revolutionary leaders should have stepped aside, he argues, since “the skills and expertise required to wage a successful liberation struggle are not the same as those needed for successful economic development.” None were inclined to do so and more than a few were determined to cash in on their victory.

The result, detailed by Ayittey, was economic disaster. The desire to prove that the newly independent states could succeed encouraged counterproductive economic strategies: state-led socialist planning; expensive showcase projects; rapid industrialization and urbanization. As he notes, “This psychological disposition, while understandable, plunged many African countries into a development quagmire.”

Poverty, corruption, and foreign aid

Ayittey devotes two detailed chapters to the often brutal and always counterproductive economic and political policies adopted by postindependence governments. His judgment is scathing, but born out by the facts:

Africa’s postcolonial development effort may be described as one giant false start. The nationalist leaders, with few exceptions, adopted the wrong political systems (sultanism or one-party-states); the wrong economic system (statism); the wrong ideology (socialism); and took the wrong path (industrialization via import-substitution). Equally grievous, perhaps, was the low caliber of leadership. Functionally illiterate and given to schizophrenic posturing and sloganeering, the leadership lacked basic understanding of the development process.

For decades corrupt and incompetent African leaders blamed the West for their problems. They demanded — and received — large-scale aid transfers as their supposed due. But their nations’ decline continued, often accelerating.

Indeed, as Ayittey demonstrates, Western aid officials have been complicit in Africa’s decline. The donors created many problems with foreign assistance. Much was provided on the basis of Cold War political purposes rather than sensible economic rationales. Aid programs and bureaucracies rarely acted as paragons of efficiency.

However, the greatest failings came on the recipient side. Corruption was rampant. Complains Ayittey,

More maddeningly, the donor agencies knew or should have known all along the motivations and activities of corrupt African leaders and that billions of aid dollars were being spirited into Swiss banks by greedy African kleptocrats.

Even when it wasn’t stolen, “aid” often was wasted, immediately consumed, or “invested” in money-losing projects that could not be sustained. In this way “aid” often proved to be a hindrance. The abundant financial transfers enabled corrupt leaders to remain in power and follow foolish economic policies. The foreign aid subsidized the very causes of poverty in the recipient nations.

As Ayittey puts it so nicely (yet sadly), “The Byzantine maze of state controls and regulations provided the vampire elites with golden opportunities for self-enrichment.” Every failure, such as those in agriculture, led to a new round of interventions, such as price controls, causing more harm.

Ultimately, both the cause of and solution to poverty lie with the degree of economic freedom, especially for entrepreneurial peasants. Writes Ayittey,

Consensus is growing among economists that government, economic management, institutions, and economic freedom have more to do with successful economic development than natural endowments.

It is economic freedom, especially for those at the bottom of the economic ladder, that offers Africa hope. Until now, Ayittey complains, African elites have impeded development by attempting to control the “Atingas,” or peasants:

Seduced by sophisticated modern gadgetry and preoccupied with aping foreign paraphernalia, the elites seldom consider the Atingas “partners in development.” Worse, African governments run by the elites repress, brutalize, and plunder the wealth of the Atinga. How then does development occur in such an atmosphere?

It can’t. Only by removing the controls and interventions of the elites and leaving peasants free to be entrepreneurs will African nations finally move toward economic prosperity and higher standards of living.

Like a number of other recent economists studying development, Ayittey derides the endless succession of grand initiatives offered to save Africa. The answer to Africa’s problems won’t come from outside the continent. Rather, he writes, “the resources Africa desperately needs to launch into self-sustaining growth and prosperity can be found in Africa itself.”

He cites Africa’s “indigenous economic system,” with its emphasis on family and tribe in the midst of free markets and trade. Needed is a fresh start at development that places peasants, or the Atingas, “full-square at the center and starts from the bottom up, rather than the top down.” Development can proceed at the village level, assuming “there is peace, order, and economic freedom — that is, the country is not wracked by conflict and the Atingas are free to produce what they want, sell wherever they want, at whatever prices they choose to charge.” Ayittey goes on to offer some detailed steps to promote such a strategy.

For too long many Western political leaders have been afraid to speak the truth to African political leaders. Not so Ayittey:

Africa is a mess — economically, politically, and socially. Despite Africa’s vast natural resources, its people remain mired in the deadly grip of poverty, squalor, and destitution while buffeted by environmental degradation and brutal tyranny. Most Africans are worse off today than they were at independence in the 1960s. African leaders have failed Africa. African politicians have failed. African intellectuals have failed Africa, too. The failure is monumental.

Enabling Africa to switch course and fulfill its potential won’t be easy: vampire elites show no sign of wanting to give way and Western leaders have done more to impede than promote reform for years. But across Africa average people are demanding change. With Ayittey’s help, they have a better hope of tossing the wabenzi upon the trash heap of history.

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Doug Bandow is vice president of policy at Citizen Outreach, the Cobden Fellow in International Economics at the Institute for Policy Innovation, a senior fellow at the Cato Institute, and serves as adjunct scholar for The Future of Freedom Foundation. He is a former special assistant to President Reagan; he is also a graduate of Stanford Law School and a member of the California and D.C. bars. BOOKS BY DOUG BANDOW: Leviathan Unchained: Washington’s Bipartisan Big Government Consensus (forthcoming) Tripwire : Korea and U.S. Foreign Policy in a Changed World (1996) Perpetuating Poverty : The World Bank, the Imf, and the Developing World (1994) The Politics of Envy : Statism As Theology (1994) The U.S.-South Korean Alliance : Time for a Change (1992) The Politics of Plunder : Misgovernment in Washington (1990) Beyond Good Intentions : A Biblical View of Politics (1988)

Reading List

Prepared by Richard M. Ebeling

Austrian economics is a distinctive approach to the discipline of economics that analyzes market forces without ever losing sight of the logic of individual human action. Two of the major Austrian economists in the 20th century have been Friedrich A. Hayek, who won the Nobel Prize in Economics, and Ludwig von Mises. Posted below is an Austrian Economics reading list prepared by Richard M. Ebeling, economics professor at Northwood University in Midland and former president of the Foundation for Economic Education and vice president of academic affairs at FFF.